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Before the end of 1Q19, we learned that two more LED lighting operators are cutting off their LED lighting business. The US LED giant Cree announced the selling of its lighting business to Ideal Industries on March 15 and power company Eaton posted its plan to spin off the lighting business.
Restructuring business focus to concentrate on higher margin operation has been a trend the LED industry. LEDinside pointed out that the price and profit of LED lighting products have dropped in the past years with increasing competitors joining the industry to share the market. The China-US trade disputes starting in 2018 aggravate the situation. As a result, despite that LED lighting market penetration continues to expand; industry players have announced their exits in the LED lighting industry.
With the aim to become a focused powerhouse semiconductor company, Cree signed an agreement to sell its Cree Lighting, which includes the LED lighting fixtures, lamps and corporate lighting solutions business for commercial, industrial and consumer applications, to Ideal Industries. Cree will then center Wolfspeed business for positioning itself as a semiconductor leader.
On the other hand, Eaton will establish a spin-off for its lighting business which will including Eaton’s global airport lighting business and Mains lighting. The company spun off the lighting business as it dilutes margin performance and the spin-off is set to “prioritize and fund its growth initiatives.”
Prior to Cree and Eaton, Osram sold the lamp business unit LEDVANCE to Chinese company MLS in 2017 and announced further plan to split the luminaires business last year for transforming itself to a high-tech photonic company. Meanwhile, after announced the plan to sell the lighting business by the end of 2017, GE had signed an agreement with American Industrial Partner (AIP) to sell Current, powered by GE business in November 2018.
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